Tuesday, September 9, 2008
In a not so surprising move the NY Times reports that 23 and Me will be lowering their prices from 999 USD to a whopping 399 USD. That is no joke. There are some market reports out there that push the testing button and ask patients at what price they would likely pay for a genetic test out of pocket and guess what.......375 is the magic number. This was data researched by Cogent back in 2005. The real issue is does the public view this as one test or multiple.
I think we know the answer......a genetic test is.......A genetic test. Regardless of whether it is based on SNP data or not. The public views a sample as a sample for ONE genetic test, not 20. And they aren't likely to pay the 20 price for just one. More importantly, this spells doom for multipex tests that are expecting huge payout for multiple tests out of pocket to diagnose conditions.....unless of course the USPTO allows a patent on the multiplex test.
So why am I not surprised? The scuttlebutt about these DTC testing companies is that they are bleeding cash like they were cut in the carotids.....Why? They have no services to fall back on. So while they are reliant on a test to make their money.......Services like Helix Health of Connecticut just keep swimming. I am sure glad we didn't have to pay that bar tab.......
So what does this mean? Several things.
1.) We are likely to see a spike in the usage of the test....remember 375 is the hot button. I am sure Google will be happy with that spike.
2.) We will have more patients in need of a physician to help them work through these results
3.) Unless they can sell a million tests quickly....The other DTC companies may follow suit soon enough.......
The Sherpa Says: DTC testing isn't the problem.....the market is........See Burrill and Company for further clarification of that. T-minus 1.5 weeks for the first of The Sherpa Plan......
Posted by Steve Murphy MD at 6:07 AM